Where to go for pension advice
Your retirement should be spent enjoying life rather than worrying about money, so it’s vital to make sure your savings are working as hard as they possibly can for you.
However, with so many investment options to choose from, and various different ways to take an income from your pension once you reach retirement, it’s not always easy to work out which way to turn.
Lisa Picardo, Chief Business Officer UK at PensionBee, said: “Engaging with your pension doesn’t have to be overwhelming. Many people put it off until retirement is near, by which time changing the outcome is much harder. But our research shows that small, early actions can make a profound difference.
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“Simple steps such as regularly reviewing your pension, consolidating old pots, and increasing contributions when possible, can dramatically improve retirement outcomes.”
If you don’t feel confident managing your pension on your own, you may want to consider seeking professional financial advice. An adviser can suggest where your retirement savings should be invested based on your approach to risk and your investment timeframe. They can also recommend whether to use your pension to buy an annuity, or guaranteed income for life, when you stop work, or alternatively to take an income from your pension as and when you need to via drawdown.
Take advantage of free guidance
If you’re aged 50 or more, it’s worth noting that you can get free, impartial guidance on the options available to you from PensionWise, which is provided by the government-backed MoneyHelper service.
This is specifically for people with defined contribution pensions, either workplace or personal pensions, and you’ll be provided with a summary of your pension options and next steps. You’ll also be given details of where to go for further support. You can book your free Pension Wise appointment online, or you can book your appointment by calling 0800 138 3944.
However, bear in mind that you won’t be given specific recommendations or information that’s tailored to your individual circumstances at your session - if you want this, you’ll need to speak to a financial adviser.
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The cost of advice
There’s no escaping the fact that pension advice comes at a cost, so you need to check charges carefully before you proceed. They will usually be charged as a percentage of your retirement savings, typically 1% or 2%, or you may sometimes be charged an hourly fee.
However, ultimately the hope is that using an adviser will save you money over the long term. According to an Unbiased.co.uk survey of UK savers, the average saver over 40 who took financial advice increased their savings levels by £98 per month due to the advice they received.
If you’re worried about covering the cost of financial advice, then the UK Pensions Advice Allowance enables you to take out up to £500 from your pension savings up to three times over your lifetime. You can only withdraw £500 once in any given tax year.
The best way to find an adviser is usually through word of mouth and personal recommendation, or alternatively you can search for qualified advisers in your area at Vouchedfor or Unbiased.